TIOL-DDT 2035 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 2035 </font><br>
31.01.2013 <br>
Thursday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">IRS Officer's plea for promotion as Commissioner - Review ordered by CAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is the case of the applicant that despite having been recommended for promotion by the Departmental Promotion Committee (DPC) which met on 5th and 6th November, 2002 and recommended the applicant along with others for promotion to the post of Commissioner of Income Tax (CIT) which was approved by the Appointment Committee of the Cabinet (ACC) on 18.02.2003, he was not promoted to the post of Commissioner of Income Tax (CIT) but his juniors were promoted w.e.f. 30.04.2003. The reason for his non-promotion was that he was placed under suspension vide order dated 04.04.2003 following a raid conducted by the CBI on 21.03.2003 in his residence. Consequently, a FIR was registered against him alleging that he was in possession of disproportionate assets. The applicant's case is that the lawful assets of his relatives who are working and have independent sources of income have been included in his assets. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CAT directed the Competent Appointing Authority to take the first review of the applicant's case to decide whether applicant's ad hoc promotion to the grade of CIT as on 05.09.2007 would be against the public interest as per paragraph 5 and 5.1 of the DOP& TOM dated 14.09.1992. In case he is found suitable as per OM dated 14.09.1992, the same shall be placed before a special DPC to be convened and if found fit, he shall be accorded ad hoc promotion with effect from that date with all consequential benefits. In case he is found not fit, the Competent Appointing Authority is to pass a reasoned order. It is further provided that thereafter, six monthly review should be taken up to till date, and on each event of six monthly review, if he is not extended ad hoc promotion, a specific order should be passed as to on what grounds the applicant has not been found suitable for ad hoc promotion to the grade of CIT. At any point of time he is found to be fit for <a><em>ad ho</em>c </a>promotion to the CIT grade the same shall be extended to the applicant. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=78&filename=pitara/sercaselaw/caselaw/2013/2013-TIOL-01-CAT.htm" target="_blank">Please click here for the CAT Order </a></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Total
revenue involved may be Rs One Crore but since duty involved is only Rs 48
lakhs, early hearing application dismissed </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a recent case reported by us </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2013/2013-TIOL-174-CESTAT-MUM.htm" target="_blank">(2013-TIOL-174-CESTAT-MUM)</a></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">,
the application for early hearing filed by the <em>CCE, Pune-I</em> on the
ground that the revenue involved is<strong> about</strong> Rs.1.13 Crores
was dismissed by the Division Bench on 31.10.2012 by observing thus -</font></p>
<blockquote>
<p align="justify"><em><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">"</font><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Considering that this bench of the Tribunal is already burdened with more than <strong>18000</strong> appeals and as we are not working at full strength, and further we consider that the appeals filed in the year <strong>2004</strong> are yet to come on board for hearing, therefore, we consider that appeals having revenue involved <strong>less than Rs.3 crore</strong> would not be considered for early hearing. Therefore, we dismiss the application for early hearing." </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We have also come across another case heard by the same Bench almost four weeks earlier to the reported decision and where the application for early hearing filed by the Commissioner of Customs (Import), Nhava Sheva was dismissed on the ground that the duty amount involved is only Rs.48 lakhs. Interestingly, the Revenue had filed the said application contending that the <strong>total</strong> revenue involved is <strong>more</strong> than Rs.1.00 crore. Obviously, this included the equivalent penalty and others of the same ilk.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A fact notable <em>vis-a-vis </em>the order dated 31.10.2012 is that in less than a month, the minimum amount for early hearing shot up to Rs.3crores. Take a look at the following extract from the order - </font></p>
<blockquote>
<p align="justify"><em><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">"2. On inquiry it is found that the duty amount is only Rs.48 lakhs. As this Tribunal is having more than 18,000/- (sic) appeals pending before the Mumbai Bench only, <strong>this Tribunal is giving preference to those appeals where duty involved is more than Rs.1.00 crores</strong>, therefore, we do not have any reason for early hearing of the appeal. Accordingly, the application filed by the revenue for early hearing is dismissed."</font></em></p>
</blockquote>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(See </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=28&filename=legal/cestat/2013/2013-TIOL-191-CESTAT-MUM.htm" target="_blank">2013-TIOL-191-CESTAT-MUM</a></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">) </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exempt MRO from Service Tax - ASSOCHAM Conference </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Associated Chambers of Commerce and Industry - ASSOCHAM held its National Conference on Service Tax yesterday at New Delhi. It was suggested that Maintenance, Repair and Operations (MRO) Business has a huge potential to attract foreign investments and earn precious foreign exchange. Hence, it is desirable to exempt the MRO services as a whole from imposition of service tax in order to promote the industry in India. MRO services needs to be included in the negative list of services, which are not taxable. They recommended that for promoting the upcoming MRO business which has just begun to grow in India MRO services should be exempted from service tax. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">JK Mittal, Co-Chairman ASSOCHAM National Council on Indirect Taxes commented that CENVAT credit of Service Tax paid on Goods Transport Agency (GTA) services for outbound transport should be allowed without any condition. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The conference was inaugurated by Dutt Majumder, former Chairman of CBEC and at present Indirect Taxes Ombudsman. He said that there was lack of awareness among the taxpayers about the institution of Ombudsman and that industry as well as general public was hesitant in filing complaints. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Transfer
is exigency and administrative decision -
Executive has unfettered rights to transfer employees from one place
to another - CAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> Commissioner of Income Tax is before the Central Administrative Tribunal (CAT) against his transfer. One of the grounds for retention was children's education. The Tribunal noted, "<em>His two children are college going students and are studying at Amity University. They are not school going children for whose education the parents are to be at the station of education. The officers of applicant's stature should not take stand to continue to be in a place for their children's higher education in the universities</em>." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal observed that transfer is part and incidence of the service conditions of an employee, which should not be ordinarily interfered with by a Court of law, unless it is found that either; </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) that the authority who issued the orders, is not competent to pass the transfer order; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) that the service rules prohibit such transfer; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the order is mala fide either in fact or in law; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) the transfer suffers from arbitrary action of the executive. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Transfer is an exigency and incidence of service and is an administrative decision. The executive has unfettered rights to transfer its employees from one place to another place. However, interference by the Tribunal with transfer orders should only be in very rare cases. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal also observed that the ‘Transfer Guidelines' are administrative one and does not have statutory backing. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=78&filename=pitara/sercaselaw/caselaw/2013/2013-TIOL-02-CAT.htm" target="_blank">Please click here for the CAT Order </a></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Women with Cocaine Diapers arrested by US Customs </font></strong></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/Cocaine_Diapers.jpg" alt="Legal Corner Icon" width="412" height="312" hspace="5" border="0" align="center"></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TWO</strong> ladies have been arrested in JFK airport in US smuggling 6.5 kgs of cocaine hidden in 'diapers' under their pants. This was detected by a drug-sniffing Customs dog, but a search of the luggage did not yield anything. While searching, a Customs Officer noticed a hard object near the lady's waist and buttocks. Lo and behold, it was cocaine! </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> - Friday's cases</font></strong></font></strong></font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left">Service Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Rate of tax applicable is one prevailing at time of providing service, not receipt of payment. TRU instructions quashed: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE taxable event, in so far as service tax is concerned, is the rendition of the service. That being the position, the taxable events in the present writ petition had admittedly occurred prior to 01.03.2008. At that point of time, the rate of service tax applicable in respect of the services in question was 2% and not 4%, which came into effect only on or after 01.03.2008. Therefore, the rate of tax applicable on the date on which the services were rendered would be the one that would be relevant and not the rate of tax on the date on which payments were received. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income tax - Whether principle of burden of proof as embedded in Section 106 of Evidence Act, can be extended to Section 271(1)(C) of I-T Act when assessee fails to explain source on income surrendered to buy peace - YES: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> survey u/s 133A was conducted at the business premises of the assessee in the course of which some documents pertaining to the assessee were found and were impounded. These documents consisted of blank transfer deeds for shares duly signed, affidavits, share application forms, copies of bank accounts, income tax returns and assessment orders of certain other companies. The documents appeared to have belonged to certain entities who had applied for shares in the assessee company, and the AO wanted the assessee to prove the nature and source of the monies received as share capital, the creditworthiness of the applicants and the genuineness of the transactions. In reply to this, the assessee stated that share application money from different entities aggregating to a sum of Rs.239lacs was received, however, it could provide explanation only for a sum of Rs 182.51 lakhs, and the balance amount of Rs 56.49 lakhs was not explained. The assessee further stated that with a view to avoid litigation and buy peace and to channelize the energy and resources towards productive work and to make amicable settlement with the Income Tax Department a sum of Rs.56.49 lakhs is being surrendered as income from other sources. Thereafter, the offer of Rs 56.49 lakhs was scaled down to Rs 40.74 lakhs as a revised offer by the assessee. The said amount was added to the total income for taxation. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Sections 11A& 33 of CEA, 1944 - Administrative directions of the CBEC allocating different monetary limits for adjudication of cases by Central Excise officers cannot cut down jurisdiction vested in them by statute and may be followed by them at best as matter of propriety - Setting aside by Commissioner(A) of order of AC, C.Ex, though on an appeal filed by Revenue, adjudicating case involving C.E duty in excess of Rs.5 lakhs is unsustainable and bad in law - order of adjudicating authority restored: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AC</strong>, C.Ex.,Powai Division, Mumbai-II passed an order against the respondent confirming Central Excise duty demand of Rs.6,61,550/- u/s 11A(1) of the CEA, 1944 and also imposed interest u/s 11AB and an equivalent penalty u/s 11AC. Although no portion of the demand raised in the SCN was dropped or for that matter no penal provision proposed was missed out, the CCE, Mumbai-II did not like the AC, C.Ex. transgressing the monetary limits contained in the Board Circular 865/3/2008-CX dated 19.02.2008 inasmuch as in terms of the said Circular the AC, C.Ex could have decided cases involving a duty demand of up to Rs.5 lakhs ONLY. So, the CCE, Mumbai-II set in motion the review process and resultantly an appeal came to be filed before the Commissioner(Appeals) by the Revenue. The Commissioner(A) accepted the plea of the Revenue and set aside the order passed by the AC, C.Ex., Powai Division. This should have ended the matter but the Revenue had another grievance - that the lower appellate authority did not give any liberty to the competent authority to decide the matter on merits. And once again, the CCE, Mumbai-II is before the appellate authority, the only difference being that he is before the CESTAT. The respondent assessee chose to ignore the rumblings and remained absent in the proceedings before the Tribunal.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tomorrow for the judgements </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day </font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p>
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